Aquila Resources Ltd has completed the feasibility study for the Washpool hard coking coal project, which confirms the technical and economic viability of the project.

The project is located in the Bowen Basin in central Queensland, approximately 260 km west of Rockhampton and 24 km northwest of Blackwater. It lies to the immediate west of the Curragh mining operation and to the east of the Ensham mine. The feasibility study proposes an open cut operation mining 4 million tpa of ROM coal, to produce 1.6 million tpa of high rank hard coking coal over a mine life of 25 years, with the coal to be exported through the proposed Wiggins Island Coal Terminal in Gladstone.

This study commenced following completion of the initial concept stage in June 2009. The work that has been completed, is based on exploration programs undertaken between July 2009 and February 2010, which included both drilling and coal quality coring work and the associated technical testing. In addition, a series of engineering studies have been undertaken to produce capital and operating cost estimates for the Project.

Subject to statutory approvals and completion of further technical studies, construction of the mine could commence in 2012 with first coal mined early in calendar 2013.

Washpool Hard Coking Coal Project Regional Plan

Capital costs

The outcomes of the Feasibility Study, indicate that the Project can be developed for a capital cost of AU$ 320 million.

Operating costs

Results of the study confirm that the mine can produce coal for approximately AU$ 106/t (FOB operating cost, excluding royalties, over the first ten years) and the mine has a life of 25 years, although potential additional resource in the south east area of the mine where further drilling is planned, may allow for a mine life in excess of 25 years.

Coal quality

The Washpool product will be a hard coking coal with very strong coking properties and a higher than specification ash. Whilst the market acceptability of higher ash coking coal is growing, the marketing strategy for the project will be to target end users with a view to developing blends with weaker low ash coking coals.

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